The Bank of Canada just lowered interest rates again, cutting its policy rate by 25 basis points to 2.75%. If you have a variable-rate mortgage or a line of credit, this likely means some relief in the form of lower interest costs.
What this means for you
Most lenders are expected to drop their prime rate to 4.95% in the coming days, which will bring down borrowing costs for many Canadians. TD Bank, which typically prices its mortgage prime rate slightly higher, is expected to lower its rate to 5.10%. If you have a variable-rate mortgage with adjustable payments, you can expect to save about $14 per $100,000 of mortgage balance on a 25-year amortization. If your variable-rate mortgage has fixed payments, more of your payment will now go toward your principal. Fixed-rate mortgages won’t be affected immediately, but if rates keep trending lower, it could mean better renewal or refinancing opportunities down the road.
What’s next?
Looking ahead, the Bank of Canada will be keeping a close eye on both inflation and broader economic risks, including the potential impact of U.S. trade tariffs. The next rate decision is set for April 16.
If you’re wondering how this could impact your mortgage strategy, let’s chat. I’d be happy to help!